"The funny money is gone and now we are all coming down to earth"

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: time like this is always limited. Today, take the top 10 market cap companies in India and compare it with last year’s top 10. One year ago, two out of 10 top market-cap companies in the country were from the public sector. Today, it is 6 out of 10. It is a very significant development because in a time like this, the government and only government-owned entities have to make things happen. It is a very perverse logic but when rest of the world moves towards getting government into companies, we already have them.

Shaubik: A rapid cut in CRR and intelligent government spending. Suppose both things happen, how long will it be before lending rates are cut?

I think it could happen in the next few weeks or months. It all depends on how soon the confidence is built. And right now, there is too much talk of bad news. We want to talk about some good news. It is said that recession happens in the minds of people. India, today has the safest system because of the sound regulation and monitoring by the government. We don’t need bailouts and therefore, in a way, the system has taken care of all the banks. In India, most of the banks had a capital adequacy ratio of 10% plus. Therefore we have a regulatory system that saved us.

Surabhi: With the financial crisis, do you think it is the right time for India to go in for financial sector reforms in banking and insurance?

Reform is a wonderful generic word. Anything that makes the system efficient while keeping it safe is welcome. Anything that makes us more cowboyish should not be welcomed. What I have seen is that very often, this reform argument is backed by many lobbies, who push it in a particular direction. This may not necessarily be appropriate for the system. A more sensible thing to do, I think, is for the system to surgically analyse the nature of the reform and then make a call. There are two emotions. One is, thank God we were a system the way it was. The other is, just because we were too conservative, we should not use that as an argument to do what is not right in going forward.